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What is Steem?
Steem crypto is the unit of cryptocurrency that is generated by using the social media platform called STEEMIT. This social media platform is an incentive motivated blockchain, this means that users make their content, discuss and vote on it and they get rewarded with Steem. They also get paid for mining, trading and just saving the STEEM currency.
How Does Steem Work?
Steem cryptocurrency is similar to other digital currencies as it allows Steem cryptocurrency to be bought, traded and sold on the market. However, it differs in the way the cryptocurrency is earned. Other types of cryptocurrency require the running of some special software and hardware. In Steem,
- New Steem units are created by the network and distributed to users based on their contributions.
- Steem users are rewarded for subjective proof, they create and vote content posted on Steemit as their proof of work and they are paid for their content. Those who leave comments also get a share.
- They are paid 50% in Steem power and the other 50% in Steem
- Steemit requires no initial investment to participate and it’s free to use.
- Steem coins can also be mined but it is not the main way to get the currency.
The developers have created a whole economy based on Steem cryptocurrency. Steem coins are the fundamental unit of the currency. There are also additional currency units such as Steem dollar and Steem power.
- Steem (STEEM) is the fundamental unit of the Steem Steem coins can be exchanged for bitcoins or other digital currencies using exchanges via prominent digital currency exchange sites, such as Poloniex etc. however, to get more out of your Steem coin. Steem can be converted to Steem power, this is known as ‘powering up’. It is recommended that you power up as Steem is very volatile and subject to inflationary losses.
- Steem Power (SP) this is the essential tools that give power to the users to shape the way things operate on the social media platform. It is also considered a long-term investment, keeping your money in the Steem power format earns more money in the long term. Steem power can be converted to Steem coins, this is known as, ‘powering down’. This is because having Steem power is similar to having an ownership in the network, and the more the network grows the larger your share of the profits.
Based on the current set up of the network, 90 percent of the new Steem currency that is generated daily goes to those who already have Steem power. The remaining 10 percent is distributed to creators and curators. Furthermore, STEEM cryptocurrency is a meritocratic system, this means that the users with more Steem power can cast votes that have a greater influence.
- Steem Dollar (SBD) this format of the Steem cryptocurrency never gets diluted or loses its value. The Steem dollar is valued at a ratio of 1:1 compared against the US Dollar. They have been created to be a stable currency, that can be sold at any particular time. Keeping Steem dollar is also rewarding but not as rewarding as keeping Steem power.
Things to Do with Steem Dollar
- They can be converted to Steem and sold immediately on the market for real money. This is known as cash
- You can hold on to the Steem dollar, this allows the money to stay in the network and you get paid a 10% interest. They can be sold at any time.
- They can be exchanged for Steem power. This is the best choice investment wise and leads to the biggest profit but patience is required.
The Technology & History
Steem is a peer-to-peer, decentralized cryptocurrency. Although there is no central control, the developers maintain a huge influence on the course of Steem. To be able to use Steem you will need to get an account on the Steemit platform. It was launched in March 2016 as whitepaper and finally became stable in July 2016, it is regarded as a block-chain based social media platform.
Steem & Steemit are created by Daniel Larimer (founder of BitShares) and Ned Scott (former financial analyst). Steemit is not just a website but an actual blockchain built on a technology called Graphene – created by Daniel Larimer. Graphene is an open source blockchain application that mostly uses C++, the application was initially created as the foundation of Bitshare. Graphene has been modified limitless times ensuring the availability of several variations. The initial release is maintained by Cryptonomex.
Graphene is fascinating because it was developed in a very modular manner, making it compliant with various applications. Graphene allows the deployment of application-specific blockchains which led to the idea for Steem in January 2016, and thanks to the excellent processing speed of Graphene, it was able to become a reality by March 2016. Graphene is capable of 100,000 TPS (Transaction Process System), this means it can ensure excellent industrial performance.
Pros & Cons of Its Technology
- Security and Control – it offers a peace of mind to users as no one can access your funds unless you allow them, knowingly or unknowingly.
- Direct interaction – it allows direct interaction between users. It promotes free speech and allows payment and exchange for digital goods.
- Fast – transactions are easily verified and it only takes a few seconds.
- Decentralized – decisions that affect the Steem ecosystem are made using committee voting and Steem power voted by shareholders. Therefore, one person can’t change anything ex-post
- Flexible – the system is easily updated and implemented without upheaval.
- The password must be 16 characters long and it might be hard to recall
- It is hard to censor users even if they are breaking the rules due to the decentralized system.
- What happens next although it aims to be the next Reddit it has less than 50,000 active users monthly.
What Is Steem coin (SMT)?
Steem meaning is smart media tokens (SMT). It is a native digital asset of the Steem blockchain. It can be launched by anyone to monetize online content and create incentives to encourage user behavior. It is similar to Ethereum’s ERC-20 token, but it comes with built-in ‘Proof of Brain’ properties. Proof of brain is a token reward algorithm that encourages creation and participation.
What Is Steemit?
Steemit is a blogging and social network that is built on the Steem blockchain database. The blockchain produces the three Steem currencies which are tradable. They can be obtained from posting, voting and commenting on interesting articles. Users get paid for creating, voting on and discussion content. It allows users to find patrons, grow their wealth while engaging the community.
The aim of Steemit was to be like Reddit but also reward users for their notable contributions. The Steemit community provides members with:
- a source of curated news and commentary
- the ability to get quality answers to personalized questions
- a stable currency equal to the USD
- free payment – no micropayments accepted
- jobs that help provide to the other members of the community
Difference Between Bitcoin and Steem
- Bitcoin uses objective proof while Steem uses subjective proof. In the case of bitcoin users solve hard math questions while Steem rewards its users for their creations and curations.
- Bitcoins are produced by mining and require expensive hardware and lots of power cost. Steem, on the other hand, is gained by creating and voting on content on Steem applications like Steemit.
- Steem is free and there are no transaction fees compared to bitcoins that cost several dollars per transactions.
- The addresses are easier to remember than the bitcoin addresses.
- Scalability – at present bitcoin is theoretically capable of a maximum of 7 transactions per second while Steem is currently capable of doing thousands of transactions per second.
- Speed – it takes a minimum of 10 minutes to solve a bitcoin blockchain and even longer for transactions to clear and be confirmed. While Steem it does so in seconds making it seem instantaneous.
Unlike Bitcoin, which uses a POW (proof of work) protocol, Steem is mined using a unique version of a DPOS (Delegated proof of stake). Moreover, where Bitcoin requires you to have an industrial grade mining setup, you can “mine” Steem simply through content creation and voting.
The top 20 witnesses in Steem’s voting system are the ones that run the Steemit network. The top 20 witnesses are voted by users, who in return earn some SP. These witnesses are the ones who store all information in the block-chain with verification of blocks going on over a constant time interval of 3 seconds.
Features of the latest Steem mining system:
- Independent comments payout time
In the latest updates, comments are set to pay out by themselves with a 7-day payout schedule for comments and the posts both.
- Rewards have to be redeemed
Mining rewards will not automatically show up in your wallet. Instead, you will have to redeem them by clicking on the ‘Redeem’ button in your wallet. However, do not worry as you will not lose them if you forget to claim.
- Shared rewards
Rewards from posts are now allowed to be shared among more than one recipients. Moreover, the Steem coins can now be delegated for other users to vote.
- Linear rewards
While previously the rewards for voting were set as the square of one’s SP, they are now set to follow a more linear relationship rather than an exponential one.
Circulation Supply 246,708,137 STEEM
Total Supply 263,682,231 STEEM
It is important to remember that STEEM supply is increased by 100% every year, if the market-cap, or total value of the network, were to remain the same, it would require the Steem coin price to go down by 50%. Steem is subject to inflation. It is a short-term trading vehicle. It is not meant to be held for long periods, it is meant to be traded. Steem power is the long-term investment vehicle.
How to Buy Steem
Here are some options on where and how to buy Steem coins from various websites.
Crypto wallets are very different from the money that we use for FIAT currency. Crypto wallet is a software that allows people to send, receive and store cryptocurrencies. These wallets help to keep Steem safe from hackers, thieves, and other threats. However, it cannot eliminate all risk as the different types of wallets differ and the level of risks depend on the type of wallet in use. There are two main types: hot and cold storage wallets.
- It is an online wallet
- It has an integrated STEEM
- It is very difficult to hack as the account comes with a 16-character password, however, if password loss occurs there are keys to help you regain your account.
- This is a desktop wallet for the Steem blockchain.
- It is a lite wallet for the Steem blockchain that you can run on your desktop computer without needing to run the blockchain itself.
- They are the most expedient type of wallet available. They are regarded as hot storage.
- It is currently still experimental, so caution must be exercised.
- This is the official Steem wallet.
- It is a desktop wallet.
- It is ideal for people with large funds as it is more secure.
- It has more option compared to the one integrated on the Steemit.
- A large fraction of those operations is also available via API_Libraries like Steem-python and others.
- This is a mobile app accompaniment to Steemit.
- It allows you to keep track of your followers and messages.
- It also allows you to keep track of your wallet on the go.
- It is an application wallet. It is available for Android or iOS.
- It is very secure and comes with security measures in place to prevent loss.
- Additional security measures can be enabled such as security code and verification of email or phone number.
- Freewallet claims to store all clients coins on a cold storage wallets, thus the coins are very secure.
- If the device is lost, you have the option to freeze your account or just access it from another device
So there you have it, excited yet? well, I am. Overall with less than 2 years under its belt, Steem buy has been growing continuously and might one-day change how we look at social media. This is the perfect cryptocurrency for those who are scared to use their real money to invest in the crypto world. It is also perfect for those that are content creators and are looking for a platform that will benefit them in many ways. I hope you check it out and tell me what you think. Also, note that the world of cryptocurrency is ever growing and here we like to keep track of every type of cryptocurrency available. thank you very much for reading!
So check out our Guides on the other types of cryptocurrencies available.